Warren Buffett Net Worth 2022 (Forbes) – How Did He Get Rich? Exposed!

Warren Buffett Net Worth

Warren Buffett has an estimated net worth of $94.7 billion. Known as the “Oracle of Omaha,” Warren Buffett is an investment guru and one of the richest and most respected businessmen in the world. He earned the majority of his income from Berkshire Hathaway.

Warren Buffett displayed keen business acumen at a young age. In 1956, he founded Buffett Partnership Ltd., and by 1965, he had taken control of Berkshire Hathaway. Buffett became one of the world’s richest men and a celebrated philanthropist while overseeing the growth of a conglomerate with holdings in the media, insurance, energy, and food and beverage industries.

To calculate the net worth of Warren Buffett, subtract all his liabilities from his total assets. Investments, savings, cash deposits, and any equity he has in a house, car, or other similar asset are included in the total assets. All debts, such as loans and personal debt, are included in total liabilities.

Here’s the breakdown of his net worth:

Name: Warren Buffett
Net Worth: $94.7 billion
Monthly Salary: $400 million+
Annual Income: $6 billion+
Source of Wealth: Investor, Entrepreneur, Businessperson, Financier

Early Life

Warren Edward Buffett was born in Omaha, Nebraska on August 30, 1930. Howard Buffett, Buffett’s father, was a stockbroker and a member of the United States Congress. His mother, Leila Stahl Buffett, was a stay-at-home mom. Buffett was the only boy and the second of three children. He showed an aptitude for financial and business matters as a child, according to friends and acquaintances: the young boy was a mathematical prodigy who could add large columns of numbers in his head, a talent he occasionally displayed in his later years.

As a child, Buffett frequently visited his father’s stock brokerage shop and chalked stock prices on the office blackboard. He made his first investment when he was 11 years old, purchasing three shares of Cities Service Preferred at $38 per share. The stock quickly fell to $27, but Buffett clung to it until it reached $40. He sold his shares for a small profit but later regretted the decision when Cities Service’s stock price skyrocketed to nearly $200 per share. He later cited this experience as an early lesson in investing patience.

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First Entrepreneurial Venture

Buffett was running his own businesses as a paperboy and selling his own horseracing tip sheet by the age of 13. That same year, he filed his first tax return, claiming a $35 tax deduction for his bike. Buffett’s father was elected to the United States House of Representatives in 1942, and the family relocated to Fredricksburg, Virginia, to be closer to the congressman’s new position. Buffett continued to plot new ways to make money while attending Woodrow Wilson High School in Washington, D.C. During his high school years, he and a friend spent $25 on a used pinball machine. They installed it in a barbershop, and the profits allowed them to purchase additional machines within a few months. Before selling the business for $1,200, Buffett owned machines in three different locations.

Education

At the age of 16, Buffett enrolled at the University of Pennsylvania to study business. He stayed for two years, then transferred to the University of Nebraska to finish his degree, graduating at the age of 20 with nearly $10,000 from his childhood businesses.

He earned his master’s degree in economics from Columbia University in 1951, where he studied under economist Benjamin Graham and continued his education at the New York Institute of Finance.

Buffett sold securities for Buffett-Falk & Company for three years after reading Graham’s 1949 book, The Intelligent Investor, before working as an analyst for Graham-Newman Corp for two years.

Berkshire Hathaway

Buffet founded Buffett Partnership Ltd. in his hometown of Omaha in 1956. Using Graham’s techniques, he was successful in identifying undervalued companies and became a millionaire. Berkshire Hathaway, a textile company, was one such enterprise Buffett valued. He began buying stock in the early 1960s and had taken control of the company by 1965.

Despite the firm’s success, Buffett dissolved it in 1969 to focus on the development of Berkshire Hathaway. He phased out the company’s textile manufacturing division, instead expanding it through acquisitions of assets in media (The Washington Post), insurance (GEICO), and oil (Exxon). The “Oracle of Omaha” was so successful that he was able to turn seemingly bad investments into gold, most notably with his purchase of the scandal-plagued Salomon Brothers in 1987.

Following Berkshire Hathaway’s significant investment in Coca-Cola, Buffett served as the company’s director from 1989 to 2006. In addition, he has served on the boards of Citigroup Global Markets Holdings, Graham Holdings Company, and The Gillette Company.

Later Activity and Philanthropy

Buffett announced in June 2006 that he would be donating his entire fortune to charity, with 85 percent going to the Bill and Melinda Gates Foundation. This donation became the largest charitable contribution in US history. Buffett and Gates announced the formation of The Giving Pledge campaign in 2010 to recruit more wealthy individuals for philanthropic causes.

Buffett revealed in 2012 that he had been diagnosed with prostate cancer. He began receiving radiation treatment in July and completed it successfully in November.

The health scare had little effect on the octogenarian, who consistently ranks near the top of Forbes’ list of world billionaires. Buffett paid $28 billion for H. J. Heinz in February 2013 with private equity firm 3G Capital. Later Berkshire Hathaway acquisitions included Duracell battery maker and Kraft Foods Group, which merged with Heinz in 2015 to form the third-largest food and beverage company in North America.

Buffett launched Drive2Vote in 2016, a website aimed at encouraging people in his Nebraska community to exercise their right to vote, as well as assisting in voter registration and driving voters to a polling location if necessary.

Buffett, who endorsed Democratic presidential nominee Hillary Clinton in 2015, challenged Republican nominee Donald Trump to meet and share their tax returns. “I will meet him in Omaha or Mar-a-Lago, or he can pick the place, anytime between now and the election,” he said at a rally in Omaha on August 1. “I’ll bring my return, and he’ll bring his.” We’re both being audited. And believe me, no one will stop us from discussing what’s on those returns.” Trump declined the offer, but his refusal to release his tax returns did not prevent him from being elected president in 2016.

Buffett revealed in May 2017 that he had begun selling some of the approximately 81 million shares of IBM stock he owned, noting that he no longer valued the company as highly as he did six years earlier. His stake in the company fell to around 37 million shares after another sale in the third quarter. On the other hand, he increased his Apple investment by 3% and became Bank of America’s largest shareholder by exercising warrants for 700 million shares. Early the following year, he increased his holdings of Apple to make it Berkshire Hathaway’s largest common stock investment.

According to USA Today, Buffett donated nearly $28 billion to charity between 2006 and 2017.

Healthcare Venture

Berkshire Hathaway, JPMorgan Chase, and Amazon issued a joint press release on January 30, 2018, announcing plans to form a new healthcare company for their U.S. employees.

According to the release, the company would be “free from profit-making incentives and constraints” as it sought ways to reduce costs and improve the overall patient experience, with an initial emphasis on technological solutions.

Buffett described rising healthcare costs as a “hungry tapeworm on the American economy,” adding, “We share the belief that putting our collective resources behind the country’s best talent can, over time, check the rise in health costs while simultaneously improving patient satisfaction and outcomes.”

In March, media outlets reported that Berkshire Hathaway’s HomeServices of America Inc., the second-largest residential brokerage owner in the United States, was poised to overtake Realogy’s NRT LLC. When Berkshire Hathaway acquired HomeServices, then part of MidAmerican Energy Holdings Co., in 2000, Buffett said he “barely noticed.”

Buffett made headlines again in spring 2020 when he announced that Berkshire Hathaway had divested its holdings in the “big four” airlines — Southwest, American, Delta, and United — due to fears that the industry would never fully recover from the coronavirus pandemic.

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Personal Life

Buffett married his longtime companion Astrid Menks in 2006, at the age of 76.

Buffett previously married Susan Thompson from 1952 until her death in 2004, though the couple divorced in the 1970s. Susan, Howard, and Peter were his three children with Susan.

Success Lessons From Warren Buffett

1. The concept of Value investing

Value investing was a concept developed by Ben Graham in the 1930. It is the strategy of selecting stocks that trade for less than their intrinsic values. Value investors actively seek stocks of companies that they believe the market has undervalued.

Value investing is an interesting concept that is practiced by serious investors. Buffett helped to fine tune the concept by looking out for, not just the price of the stock as compared to the business intrinsic value, but other important parameters such as the company’s management team as well as the competitive advantage of the company’s product in the market.

Putting all these parameters into consideration, an investor can hardly go wrong in the choice of the business to invest in. Some companies have great products and sweet business plans, but mismanagement and managerial blunders could cause the company to be undervalued.

As an investor, investing in such a company and replacing the management team with a more competent bunch will earn you substantial gains. This was exactly the case with Buffett and Berkshire Hathaway.

2. Avoid the bandwagon mentality (Herd behavior)

Herd behavior is the tendency for individuals to mimic the actions (rational or irrational) of a larger group.

In finance, a herd instinct would relate to instances in which individuals gravitate to the same or similar investments, based almost solely on the fact that many others are investing in those stocks.

During the dotcom bubble several investors sank billions of dollars into dotcom businesses. Some of these investors didn’t even know jack about what some of these companies did. Buffett, for reasons best known to him, refused to invest in any of the dotcom companies. He was insulted and mocked and laughed at as a man who lived in the ice age, but he paid them no heed.

And then it came; the burst. Billions of investors’ money disappeared overnight. There were suicides and depression. Buffett laughed last.

The fact that everyone does it doesn’t mean it is right, several of those doing it are as lost as you and are only doing it because they saw the next person do it.

Stick to your guns, do what you believe is right, and not because other people are doing it. Even if your decision turns out to be the wrong one, it is still less hurtful than failing because you sheepishly followed the herd.

Favorite Warren Buffett Quotes

It is not necessary to do extraordinary things to get extraordinary results.

 

What we learn from history is that people don’t learn from history.

 

It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.

 

Chains of habit are too light to be felt until they are too heavy to be broken.

 

There seems to be some perverse human characteristic that likes to make easy things difficult.

 

Nothing sedates rationality like large doses of effortless money.

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.

You only have to do a very few things right in your life so long as you don’t do too many things wrong.

 

Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be a more productive than energy devoted to patching leaks.

View our larger collection of the best Warren Buffett quotes.

Further Reading

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How To Become Rich Like Warren Buffett?

Warren Buffett did not become rich by luck. To become as rich as Warren Buffett, you have to work smart.

Successful people become rich because they take advantage of the opportunities that come their way. They are in the right place at the right time and take the right action.

Thanks to the Internet, the world has changed massively in recent years. Nowadays it has become much easier to make money online.

Instead of looking for a 9-5 job and staying in your comfort zone, it’s better if you become your own boss as soon as possible.

You can learn how to build a digital asset that generates cash flow for you while you sleep to grow your wealth quickly.

If you seize this golden opportunity in time, you can become as successful as Warren Buffett one day.

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